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Possibility of deal on oil cut weakening ahead of OPEC meeting

by ChemOrbis Editorial Team - content@chemorbis.com
  • 29/11/2016 (15:23)
According to different media reports, grounds for an OPEC agreement on an oil cut have considerably weakened ahead of the meeting to be held on November 30 in Vienna. The pessimistic sentiment was driven by Saudi Arabia’s pulling out from a meeting that was to be held with non-OPEC members last week saying OPEC members should first come to an agreement about whether to cut production or continue with current levels.

In addition to the long-lasting hesitation on the part of Iran and Iraq to agree to the terms of a supply cut, Saudi Arabia’s Oil Minister also said output curbs are “not essential”. Russia also announced today that it will not attend the OPEC meeting on November 30.

Khalid al-falih, the Saudi Oil Minister, also mentioned the possibility of not being able to come to an agreement on the subject in Vienna for the first time.

According to reports, Goldman Sachs estimates prices will hover around an average of $45/bbl if a deal cannot be reached. In case of an agreement to cut oil to 32.5 million barrels/day, which is now highly unlikely, it expected oil prices could rise to the low $50’s/bbl.

Brent was trading at $47.64 per barrel on Tuesday morning.
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